Quote from: mikeywith on Today at 04:11:57 PM

Quote from: Huxley23 on Today at 03:42:56 PM

Price does not follow mining activity, the activity follows the price in the long term. One diff adjustment is simply not enough to say that we will go to the moon.

There is a valid argument that even this may be incorrect to a certain extent if you take a look at the hash rate chart from Dec 2017, all the way to today's date, it's فthe exact image (inverted) of the price chart, in other words, price kept going down for months while difficulty kept going up.

It has to do with many factors, gear efficiency, more gamblers entering the game, newbies have no clue about anything and they keep adding more gears to the network, some might even might at loss in the hope for BTC price to go up "which is not the best thing to do IMO", there are many other reasons why mining activities can be almost completely independent of price.

The reason why diff was still increasing after Dec 2017 is the pre-orders that were placed during the time when BTC kept rising (and people establishing mining farms hoping the price will go up). The first major drop in diff came after the drop in price at the end of 2018. (see? price dropped first, then hash-rate followed, not vice-versa). The reason why hashrate doubled after January 2019 is the new-gen mining equipment entering market. When the price peaked at 14,5k people were placing pre-orders for almost 5-6 months (insane), also this is why the diff continued to rise even price was steadily decreasing (new-gen gear was entering the market from pre-orders that were placed when BTC was at 14k). Drop from 10k to 5k in price? hashrate followed and also dropped, but only to a degree that the big farms still remain in profit. The most important part to understand here, is that the huge mining farms (mostly in China) own the network. They are being run as a normal business and they would never run their business in red numbers (thanks to the low price of electricity they get), even though price dropped by 50%, they still remain in profit and are able to continue mining. If price remains sub 7k even after the halving, we will see a major drop in hash-rate.

Huxley23

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